Nokia Looks To Create A Halo Effect With The Innovative Lumia 1020

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Living up to its promise of bringing top-notch camera technologies to Windows Phones, Nokia (NYSE:NOK) introduced the Lumia 1020 to much fanfare Thursday. Coming on the heels of the recently launched Lumia 925 and 928, the 1020 is Nokia’s most ambitious Windows Phone till date with a jaw-dropping 41-megapixel camera – the same technology that Nokia had debuted with the Symbian-powered 808 PureView last year.

While the new Lumia may not look very different from the high-end Lumia 9xx series on the outside, it is packed with several camera features such as a six-lens Carl Zeiss optics, an ultra-large image sensor, optical image stabilization (OIS) that lets you take photos while moving as well as a very powerful Xenon flash. Although Nokia’s stock did not move much on the announcement which was expected given that the smartphone had been heavily leaked and rumored prior to the launch, it is without a doubt a very important milestone for the Finns who have been looking to differentiate their phones from rivals with high-end camera technology and other hardware features. At a time when there seems to be a serious lack of meaningful differentiation among smartphones, the Lumia 1020 does offer a compelling picture-taking experience. However, whether this is the innovation that the market has been waiting for, is a tough question to answer.

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Is 1020 Only A Marketing Stunt?

Along with hardware, Nokia has innovated on the software side, bringing new features such as the Nokia Pro Camera and Smart Camera modes to its Lumia line. With these features, Nokia is counting on there being enough number of high-end users that want to take better high-quality photos with their smartphones. In doing so, it is looking to mask the app disadvantage that the Windows Phone ecosystem currently has by spawning a new generation of camera hybrids. At a time when consumers are increasingly taking to mobile devices for their photo consumption needs (amply exemplified by the Instagram phenomenon), Nokia’s wager may just work out. But, for that to happen, it needs to get the 1020 into as many hands as possible.

However, Nokia is launching the latest Lumia though an exclusive agreement with AT&T in the U.S. This could hurt sales by limiting the addressable customer base, but the Lumia brand will also receive a boost from AT&T’s marketing spend. At the same time, Nokia is positioning the 1020 as an ultra high-end mobile device, pricing the base model at $299 – a cool $100 over the iPhone 5 (although it must be added that the 1020 has 32GB of memory in its basic version, double that of the iPhone). The pricing strategy shows that Nokia is looking to attract only a very niche set of consumers for a new camera technology that isn’t available on rival smartphones. True to its word, Nokia has now launched a Windows Phone at almost every price tier (except the very low-end) – even creating one that didn’t exist before. In more ways than one, Nokia is treading the same path as Samsung, flooding the market with smartphones and getting more marketing dollars behind the products.

All the attention that Nokia is grabbing with its head-turning 41-megapixel camera may not translate into hard numbers for the expensive 1020, considering the hold that Android and the iOS have on the market. But the halo effect that such an innovative product will have on the cheaper Lumias may be Nokia’s end game here.

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